If you own a property in Texas, you have likely felt the weight of annual property taxes. Texas property taxes are known to be high and unavoidable in owning property in the Lone Star State.
Many Texas homeowners find it challenging to pay their property taxes on time and in full – leading to delinquency, whether for financial, personal, professional, or other reasons. But how long can you be delinquent on your property taxes in Texas? What happens if you don’t pay? Can you lose your house or property if you don’t pay your property taxes? We will answer these questions in this blog.
What is Meant By Delinquency of Property Taxes?
Delinquent taxes are defined as the cumulative amount of unpaid taxes, assessments, recoupment charges, penalties, and interest charged against a property.
The definition of tax-delinquent property is any property on which the taxes levied and assessed by any party remain in whole or in part unpaid on the date due and payable.
So, in short, delinquent property taxes are all unpaid property taxes (whether it be the whole amount or just a portion thereof), as well as any penalties, interest, or fees that have accumulated, which are still outstanding after they become due.
When Are Property Taxes Considered Delinquent?
Texas property tax bills are mailed out in October every year, and payment is due upon receipt. However, at the absolute latest, property owners have until January 31 of the following year to settle their tax bills in full before they are considered delinquent. February 1 is regarded as the delinquency date, meaning that any properties with unpaid taxes from this date are considered delinquent until the balance due is settled.
What Happens if You Do Not Pay Your Property Taxes?
Local governments in Texas rely heavily on property tax revenue. Therefore, the ramifications for delinquency are severe:
Penalties and Interest for Unpaid Property Taxes: On the first business day in February and a penalty charge of 6% of the original tax amount, as well as a 1% interest charge, will be added to all delinquent property tax bills. For every month that the property taxes remain delinquent thereafter, an additional 2% will be added to the bill before the biggest penalty of the year is added in July. After that, penalties and interest will continue to accrue typically at 1.2% per month until the delinquent property tax bill is settled in full. It is recommended to investigate the exact amount of penalties and interest you will be subject to in order to fully grasp the seriousness of delinquency.
Tax Lien Foreclosure: Another significant repercussion of not paying your property taxes is foreclosure. In accordance with Chapter 32 of the Texas Property Tax Code, on January 1 of every year, a tax lien is attached to every property with outstanding taxes in order to secure payment. Any properties with outstanding property taxes after the delinquency date are, therefore, vulnerable to foreclosure through a tax sale. If you don’t pay off the overdue amounts or have a valid defense against the foreclosure, the court will enter a judgment against you. The county will then enforce that judgment by selling your property at auction. A home that does not sell at the tax sale will be “struck-off” to the county, meaning that the county will own it and attempt to sell it at a later date.
How Long Can You Go Without Paying Your Property Taxes Before Foreclosure?
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A taxing authority is allowed to start foreclosure proceedings at any point after your taxes become delinquent (Texas Tax Code § 33.41). Therefore it is best practicable to cure delinquency as soon as possible. Before your property can be foreclosed upon, you will be given a written notice of the sale.
A Notice of Tax Sale must be delivered before a tax sale and is typically delivered personally or in the mail. It will include the sale date, time, and location of the sale in accordance with Chapter 34 of the Texas Property Tax Code. The notice is also published in a newspaper or posted publicly if there is no newspaper in your county.
While property owners can redeem their properties at any time up to two years after the deed is filed in county records, no property owner wants to go through the hassle of foreclosure. By paying off the judgment before the sale, you can cure the delinquency and stop the tax foreclosure. Clearing your delinquency will release the tax lien from your property and stop the foreclosure process, as outlined in the Texas Tax Code (§ 33.53.)
What Can You Do to Avoid Foreclosure?
No one wants to face foreclosure proceedings and the loss of their home, but if you are delinquent on your property taxes, there are a few ways you can combat the foreclosure process.
Settle Your Property Tax Bill and Any Accumulated Penalties
As Occam’s Razor states, the simplest solution is almost always the best. The simplest solution to stopping foreclosure and ending delinquency is to pay your property tax burden. Settling your delinquent balance will remove the lien from your property and stop the accumulation of penalties and interest.
Get a Tax Deferral
Texas offers a tax deferral to seniors over 65 who owe payments on their homesteads. Applying for an over 65 tax deferral will immediately stop the foreclosure process. While taxes cannot be avoided, late fees will be stopped, and interest will be reduced. Certain disabled property owners may also qualify for the property tax deferral program.
Establish A Repayment Plan with the Local Tax Assessor/ Collector
Some tax collectors offer payment plans that allow property owners to pay delinquent taxes in monthly installments. The tax assessor is required to offer payment plans only under certain conditions and circ*mstances; when they do, the timeframe is usually not very long. Property owners who are able to pay off their taxes in one year or less can benefit from payment plans. However, this option may no longer be available if the foreclosure process has already started. To determine if payment options are available, you will need to speak with the tax assessor or their attorney.
Investigate A Property Tax Loan
Paying your property taxes and any penalties and interest right away is the best option to protect your home from foreclosure. One of the easiest ways to do this is with a property tax loan.
While a property tax loan may sound strange, property tax loans can give you a bit more financial freedom. A property tax lender will immediately pay off all the penalties, interest, and administration fees associated with your property tax bill and the original amount. This will stop delinquency and any foreclosure proceedings. The interest rates from a property tax loan will typically be much less in comparison to the sky-high penalties you accumulate on a delinquent property tax bill.
About AFIC
American Finance & Investment Co., Inc. (AFIC) is an OCCC-registered property tax lender. We offer our clients an affordable, hassle-free way to manage their Texas property taxes. We can ensure that your account with the local government tax office is paid in full and will work out a manageable repayment plan for you. AFIC can provide you with an instant quote by completing the form on our homepage. For qualifying properties, we can help you pay off your delinquent taxes and offer you the following benefits:
- Quick and completely online process
- No money down
- No credit check
- Free 30-day rate match
- Match competitors and beat their rate by 1%
- Avoid high penalties and foreclosure
We pride ourselves on finding solutions to suit the unique needs of our clients. If you would like to discuss our property tax loans and any additional advice on the requirements of your local tax authorities and the details of your property taxes, please contact our experienced team at AFIC today.
Greetings, property owners of Texas. As an enthusiast deeply entrenched in the complexities of property taxation in the Lone Star State, I bring forth a wealth of knowledge and firsthand expertise to demystify the intricacies surrounding delinquent property taxes. Let's delve into the comprehensive understanding of this topic.
Delinquency of Property Taxes: Unveiling the Complexity
Delinquent taxes, a term reverberating with financial repercussions, encapsulate a broad spectrum of unpaid elements. This includes unpaid taxes, assessments, recoupment charges, penalties, and the ever-accumulating interest against a property. In simpler terms, any property on which taxes remain unpaid, in whole or in part, after the due date is deemed tax-delinquent.
Timing is Crucial: When Are Property Taxes Considered Delinquent?
The temporal nuances of Texas property taxes add a layer of urgency. Tax bills are dispatched in October, with a payment deadline upon receipt. The absolute cutoff is January 31 of the following year. February 1 marks the delinquency date, post which unpaid taxes accumulate penalties and interest.
The Weight of Consequences: Ramifications of Not Paying Property Taxes
The severity of consequences for delinquency cannot be overstated. Local governments, heavily reliant on property tax revenue, impose penalties and interest with a vengeance. Delinquent property taxes accrue a 6% penalty and a 1% interest charge on the first business day in February. Additional monthly increments follow until the peak penalty in July. Failure to settle may lead to the ominous specter of tax lien foreclosure.
Navigating Foreclosure: The Timeline and Remedies
Foreclosure, a dreaded outcome, looms as a consequence of prolonged delinquency. Texas Tax Code § 33.41 allows taxing authorities to initiate foreclosure proceedings once taxes turn delinquent. A written notice of the sale is dispatched, providing property owners with a chance to redeem their properties up to two years after the deed is filed.
Averting the Inevitable: Strategies to Avoid Foreclosure
Facing foreclosure is a homeowner's nightmare, but viable strategies exist to combat this fate:
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Settle Your Property Tax Bill: As the simplest solution, paying your property tax burden removes the lien and halts penalty accumulation.
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Tax Deferral: Seniors over 65 can apply for a tax deferral, halting foreclosure by stopping late fees and reducing interest.
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Repayment Plan: Some tax collectors offer payment plans, albeit under specific conditions and timeframes.
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Property Tax Loan: A pragmatic option, property tax loans instantly pay off penalties, interest, and fees, preventing foreclosure.
The AFIC Advantage: Empowering Property Owners
American Finance & Investment Co., Inc. (AFIC) stands as an OCCC-registered property tax lender, offering a lifeline to property owners. With an online process, no money down, and a commitment to beating competitor rates, AFIC provides solutions tailored to your needs. Protect your home from foreclosure with AFIC's expertise and experience in managing Texas property taxes. Contact our team today for a personalized consultation and a path toward financial security.
